Turkey central bank withdraws $4.2 billion market to boost reserves | Ahval

Tiny Url http://tinyurl.com/y6hxqtfc May 27 2019 Turkey central bank withdraws $4.2 billion market to boost reserves 2019-05-27 Turkey’s central bank said it withdrew $4.2 billion of foreign currency liquidity local markets in an apparent move to boost its gross reserves. The central bank increased the reserve requirement ratios – money that banks must deposit with the central bank – on foreign currency deposits and participation funds by 200 basis points across the board, according to a decision published on Monday. The measure, which the bank said was to support financial stability, will help it boost it gross forex reserves, which include the cash banks are required to park with the regulator as well as its own stock of foreign currency. The central bank’s net foreign currency reserves ped to $24.9 billion as of May 17, the lowest levels since October last year, after it sold dollars in an effort to support the lira, which fell into a currency crisis last August. The reserves had stood at $26.7 billion a week earlier. The money includes about $13 billion of swaps it borrowed local banks. Investors and economists have underscored that the central bank now has little firepower to defend the lira through interventions in the foreign currency market. The bank in Ankara says its reserves are not depleted and has called on investors to focus on its gross stock of foreign currency which is far larger than its net reserves. The bank’s gross forex reserves, including those it holds on behalf of banks, totalled $71.7 billion on May 17. It also keeps around $12.5 billion of gold. The lira rose 0.4 percent to 6.05 per dollar at 12:53 p.m. local time in Istanbul.  […]